Sumedh Singh Mandla, CEO – Grover Zampa Vineyards Ltd
Today there is a great growth opportunity for all the three sectors of the Indian alcobev industry. Among the three sectors, wine is the smallest while spirits lead the industry followed by beer. However, despite recording low volumes wine has higher growth than beer and spirits.
In the world, India is the second largest market for alcoholic spirits as per IWSR. If all liquor categories are included, then the country is the third largest market. Five Indian brands figure among the top 10 most consumed spirits brands in the world, and many home-grown brands are selling more than a million cases.
India’s alcobev market is predominantly IMFL with 330 million cases and an almost equal number of country liquor. Beer is about 300 million cases and wine is over 4 million cases. In IMFL, whisky leads the pack with 61% share followed by brandy and rum. The growth of white spirits (vodka and gin) is better than brown spirits but their base is very small.
India is considered to be a difficult country to do business in, but it has eased its business environment following the start of the Make in India drive by Prime Minister Narendra Modi. In
the present socio-economic environment, India is emerging as an important business destination.
Many international studies have predicted 10% growth for the Indian alcobev industry. Various factors are favourable to this growth. The country’s GDP growth is the fastest in the world. Every year 19 million consumers are entering the drinking age. Urbanization is happening at a faster rate than in the past. Social drinking is getting more acceptable especially in the main cities. Women are increasingly becoming more open to drinking wine, spirits and cocktails. This was not the case a decade ago.
Another factor favouring high growth in the alcobev industry is that India is the world’s third largest economy in terms in purchasing power parity. In fact, this is a very strong consideration for anyone thinking of doing business in the alcobev industry. The new generation Indians have more disposable income and are more willing to experiment with their drinking choices than the previous generation.
Today the Indian consumer is upgrading to premium liquor categories. In whisky, the premium
and super premium segments are showing the fastest growth. In wine too, lots of people
have upgraded from port/fortified segments to premium segments. This is a very positive sign of premiumization of the alcobev industry. I think this is the ideal time when we can change
a whisky consumer to a wine, beer, gin or a vodka consumer. Innovation and packaging, branding, and starting new segments will greatly help in recruiting consumers to the liquor segments other than whisky.
Diversity of India makes it a great market because it has buyers for every product, from
the cheapest thing to the most expensive thing in the world. We have seen buyers happily picking up a wine worth Rs 5000 a bottle. However, the perception of value for money plays a great role in the buying decisions of Indians, particularly the middle class. The middle class expects better value for the money, be it food, automobile or alcobev or any other lifestyle product. So, if you want to achieve volumes then you have to consider value-for-money pricing.
The 4.32 million cases Indian wine industry (as per IWSR) has been recording double digit growth for almost 10 years. It’s the largest growth after China in Asia.
Our wines and those of Sula and Fratelli are now exported to 21 countries. It’s a remarkable
achievement for the Indian wine industry in a short span of about 25-30 years. For Grover Zampa France is the first export market and we are proud of this achievement.
In Europe, wine is produced and consumed as part of their culture. But there is no growth potential. The USA too after growing very well in the past decades has now limited scope of
wine growth. In Asia and Pacific, Japan too can’t show much growth in wine. China is currently leading in wine but I think India too can record huge growth.
India has a huge potential to grow wine grapes because at present only 2-3% of the produce in 1,00,000 hectares of grape cultivation is wine grape. In contrast, worldwide is 90% grape cultivation is of wine variety.
Indian producers are trying their best to improve the quality of their wines. When we started we tried 33 different grapes and selected about 8 and continued to grow them for a period
of time. Now lots of new Italian and Spanish grapes are being explored which again is a good sign of a growing wine industry.
Indian cuisine also has a strong role in spreading the word about Indian wines. It is getting more global and refined. It’s no more only about kebabs and curry, and we want to be the part
of that growth.
Wine tourism is also a big opportunity for wine producers as well as locals to engage in commercial activities. Sula has led the way in this field. We and Fratelli are also doing some
part of it.
Wine culture is growing fast in India. In future, high growth is expected because the number of producers and their operations will grow. I expect 20% growth. I hope that the producers who are currently operating at the micro level will start promoting their products at the macro level.